In October 2019 the State Auditor made a list of cities in CA that were most at risk of bankruptcy and El Cerrito was #7. They then met with city staff and council members and decided to recommend a full audit of the city, something that some council members and staff opposed. At a hearing on February 26, 2020, the Joint Legislative Audit Committee voted unanimously to order a full audit of El Cerrito. The full letter the state auditor submitted to the committee is found here. Below are the concerns that they identified.
- Fire Department overtime which is budgeted at 1.3 million this fiscal year.
- Overall cash flow-which now means an increase in short-term loans for the city to meet their obligations.
- Pension costs
- Lack of reserves
- Overall lack of addressing any of these issues.
The chart below shows how the short term lending has increased since 2011. These figures can be found buried in the CAFR (Comprehensive Annual Financial Report). The current 9 million dollars can be found referenced here on pages 102-114 and is specifically called out by the auditor. Notice the increase in the interest rate due to our poor bond rating. The $62,100 increase in interest (2018-2019) is the amount of the 4th of July event that council was suggesting as a cut in the last few council meetings.
Here is the part of the letter that specifically calls out the above items.
The full audit will attempt to answer the following questions.
As residents of El Cerrito, we must remain vigilant in making sure that the city supports this audit and follows most, if not all, of the recommendations. Sadly, staff and council have a history of not acting in a fiscally responsible manner and the community has lost trust as a result of this. While they have made some recent efforts at transparency there have been no substantive cuts in the 2019/2020 budget and no hearings on how to manage the fire department in a manner that both protect public safety and is fiscally responsible.
We may all have different priorities for cuts to be made and services to be saved. It is important that each of us show up at meetings and email staff and council to hold them accountable. Two council members are up for reelection in 2020 and one seat is open with no incumbent running. We must challenge those running on what has been learned from the missteps made in the past years and how they will do things differently in the future.